Park Jae-hyuk is a seasoned journalist who has provided comprehensive coverage of South Korea's corporate dynamics, economic policies, industry challenges and the global positioning of Korean companies. Based on the articles he has written since joining The Korea Times in 2016, his investigative approach has helped readers understand corporate governance, economic trends and business strategies shaping South Korea’s economy.
Posco forced to halt production as nationwide trucker strike continues
Steel products are piled on an empty lot near a Posco factory in Pohang, North Gyeongsang Province, Sunday. Courtesy of Posco
By Park Jae-hyuk
By Park Jae-hyuk
Posco halted operations at some production lines at its steel mill in Pohang, North Gyeongsang Province, due to an indefinite general strike by unionized cargo truck drivers that has continued for the seventh day, Monday.
From 7 a.m., the steelmaker suspended production at all four wire rod factories in the southeastern port city and at one of two cold-rolled steel plants there, which mainly produce steel products for home appliances and high-quality construction materials. As a result, its daily production of wire rods and cold-rolled steel decreased by 7,500 tons and 4,500 tons, respectively.
Posco produces a combined 20,000 tons of steel products every day at its Pohang steel mill.
The steelmaker has had to pile its products on vacant lots near its steel mill because its warehouses have become full since the Cargo Truckers Solidarity went on strike last Tuesday to protest the planned annulment of the “Safe Trucking Freight Rates System” designed to prevent dangerous driving by guaranteeing minimum freight rates for truck drivers.
The company expected the operation of its hot-rolled steel and steel plate plants to also face setbacks unless the truckers union ceases the strike.
“If the situation is protracted, the operation of furnaces could be suspended,” a Posco official said.
If a furnace is shut down, it will take at least three months for operations to return to normal.
The Korea Iron & Steel Association estimated in 2019 that the three-month suspension of a single furnace would reduce a steelmaker's revenue by 800 billion won ($622 million). This means that Posco's revenue can drop by 6 trillion won if it suspends the operation of all eight furnaces in a worst-case scenario.
However, there are still no signs of an agreement, as unionized truck drivers have threatened to block the transportation of raw materials to Posco, Hyundai Steel and Dongkuk Steel in Pohang. The truckers said they decided to intensify the protest after failing to reach an agreement with the government last weekend.
Although Hyundai Steel has yet to suspend the operation of its factory, it has also been unable to transport 9,000 tons of products every day.
“If the strike is protracted, we may have to adjust our production,” a Hyundai Steel official said.
Given that steel is one of the most important raw materials for carmakers, shipbuilders and home appliance manufacturers, fears have grown over disruptions in the supply of steel products, which will harm the entire Korean economy.
The Ministry of Trade, Industry and Energy estimated that the nation's key industries suffered a combined 1.5 trillion won in losses between June 7 and 12, due to the truckers' walkout.